March 6 (Bloomberg) -- Johnson Controls Inc., the largest
U.S. auto-parts maker, said it’s exploring the sale of its
automotive electronics unit.

The company retained JPMorgan Chase & Co. to assist in the
potential sale, which is in its preliminary stages, Milwaukee-based Johnson Controls said today in a statement. The company
said it wouldn’t comment further.

The assets may fetch more than $1 billion, said two people
familiar with the matter. Johnson Controls, whose market value
tops $20 billion, is exploring a sale to free up cash and focus
on more profitable divisions, such as car seats, said one of the
people, who asked not to be identified because Johnson Controls
hadn’t yet made an announcement.

Johnson Controls shares climbed 2.6 percent to $32.63 at
the close in New York, the biggest one-day gain since Jan. 2.
The shares have risen 6.4 percent this year after falling 1.9
percent last year. The Standard & Poor’s 500 Index has increased
8.1 percent this year.

The electronics unit made about $1.4 billion of Johnson
Controls’s revenue last year, selling infotainment systems,
instrument clusters and electronics that control door locks and
monitor tire pressure, according to a company presentation to
analysts in December.

A valuation of about $1.3 billion for the assets, or about
10 times earnings before interest and taxes, is a good starting
point, according to Peter Nesvold, a New York-based analyst for
Jefferies Group Inc.

Johnson Controls got 51 percent of its $42 billion in
revenue in fiscal 2012 from its auto parts unit. The company
also makes auto batteries and equipment for managing building
climates and security.